Planning For Your Retirement Future Rather Than Just Predicting
Consider these steps to help achieve the life you want in retirement.
It’s difficult to make predictions, especially about the future. Sounds like another famous quote attributed to baseball great Yogi Berra: “The future ain’t what it used to be.”* We can generally agree that predicting, forecasting and even goal-setting require a bit of time traveling into the unknown, something we’re not well-equipped to do, even under the best circumstances. But we can plan. And that’s vital to enjoying and experiencing the life we want in retirement. And while past performance is no guarantee of future results, we can learn and grow from our experiences as well as those who’ve gone before us. But if we were able to time travel and look back, are there things we would have done differently when planning for retirement?
The good news is we don’t need the time machine. That’s because more than 2,000 retirees, aged 50 and over, surveyed by the Transamerica Center for Retirement Studies (TCRS) have already done some of the leg work. They shared some insights which may be useful for those of us now planning for our golden years.
Among the findings released in December 2018, 73% agreed that they wished they would have saved more and on a consistent basis, while 64% wished they had more knowledge about retirement saving and investing. Fifty percent felt they waited too long to concern themselves with saving and investing for retirement. Almost half (47%) indicated that debt interfered with their ability to save as much as they needed for a comfortable retirement.
So, if you’re getting ready to retire, or already retired, there are a few key things you can take control of. Here are some recommendations along those lines from TCRS:
- Create a budget that includes income, living expenses, paying off debt, and financial goals such as building short-term savings and long-term retirement savings.
- Save for retirement. Start saving as early as possible and save consistently over time. Also create an emergency savings fund in order to avoid taking loans and early withdrawals from retirement accounts.
- Participate in your employer’s retirement plan. Take full advantage of matching employer contributions, and defer as much of your salary as you can. If your employer doesn’t offer a plan, then consider contributing to an IRA or other retirement savings account on a consistent basis.
To these items we would add working with a financial advisor to optimize the timing of when you claim Social Security benefits, adding a steady stream of retirement income to supplement or replace a pension, and considering if tax-advantaged and tax-free strategies make sense within your retirement plan. The latter can provide tax-free death benefits for your loved ones, along with flexible options that may provide living benefits, including chronic and long-term care (LTC) benefits.
Speaking of LTC, planning for unexpected expenses for assisted living or nursing home care is a critical part of the analysis that goes into a sound retirement income plan. This planning doesn’t always take place, however. Survey results from TCRS show that only 45% of retirees are confident they will be able to afford LTC, if needed, while 49% plan to rely on family or friends for LTC if their health declines and they need help with daily activities or nursing care.
Call Freedom America in Mansfield, MA to learn more: (800) 679-0665.
* The website Quote Investigator attributes the first quote to Danish politician Karl Kristian Steincke. You may find it here: https://quoteinvestigator.com/2013/10/20/no-predict/#return-note-7474-1
The site also notes that Yogi Berra claims that he did say the second quote, but also attributes the saying “the future is not what it used to be” to a 1937 volume of essays by Laura Riding and Robert Graves. Here is the link: https://quoteinvestigator.com/2012/12/06/future-not-used/#return-note-4966-2
“A Precarious Existence: How Retirees Are Financially Faring in Retirement,” Transamerica Center for Retirement Studies. December 18, 2018. https://www.transamericacenter.org/docs/default-source/retirees-survey/tcrs2018_pr_retiree_survey_press_release.pdf (accessed February 5, 2019).
“A Retirement Security Retrospective: 2007 Versus 2017,” Transamerica Center for Retirement Studies. September 2018. https://www.transamericacenter.org/docs/default-source/retirement-security-retrospective/tcrs2018_sr_retirement_security_retrospective_2007vs2017.pdf#page=12 (accessed February 5, 2019).